CAG raises questions, pours cold water on Kaushalya dam

In December 2005, the Haryana government approved a project for “construction of an earthen dam across river Kaushalya near Pinjore for Rs 51.37 crore with a view to supply drinking water to Panchkula town, recharge ground water, check flash floods, promote tourism and fisheries in reservoir area’’.

The administrative approval was revised to Rs 217 crore in September 2011 due to increase in the cost of land, height and top width of the dam to provide passage for residential sectors being developed by HUDA on the other side of river. The dam was finally constructed with a 34-metre height and a 30-metre top width at a cost of Rs 208.37 crore till May 2013.

“Haryana Urban Development Authority constructed water works structures and laid pipelines for providing drinking water to Panchkula town by incurring an expenditure of Rs 43.25 crore till April 2013 but the facility could not be provided due to non-availability of water in reservoir of Kaushalya Dam,’’ the audit report said.

Replying to the CAG’s objections, in October 2013, the state government claimed that “partial achievement had been made by supplying 8 cusecs/day to HUDA’’. However, CAG pointed out that “the fact remains that the envisaged benefits from the project were not achieved as the envisaged quantity was 40.3 cusecs/day (16 July to 30 September) and 18.4 cusecs/day (1 October to 15 July). In June 2013, the water level in the reservoir was at elevation level of 456.90 metre against the bed level of 450 metre, whereas the outlet from where water was to be supplied to HUDA was at 460 metres. As such no water could be supplied to HUDA’’.

Elaborating on the manner in which the contractor was “unduly favoured’’, CAG pointed out that “as per the contract, liquidated damages at the rate of 10 per cent of value for the work/final contract price were to be levied against the agency for non-completion of work in stipulated time. Extension in time was granted to the agency up to March 31, 2011.

But the agency failed to complete the work even within the extended time limit which was completed by June 2012. The department had neither extended the time limit nor levied liquidated penalty of Rs 11.29 crore (10 per cent of agreement amount of Rs 112.99 crore) against the agency. The quantum of penalty had not been decided even after the lapse of 18 months from the date of completion of work’’.
“It was noticed that a sum of Rs 2.64 crore was deducted as security from running bills of the contractor for the contract price of Rs 52.99 crore only and the security for the supplementary contract price of Rs 60 crore was not deducted. This resulted in undue benefit to the contractor of Rs 3 crore, besides reducing the security against substandard/below specification work in contravention to codal provisions,’’ the CAG said.